ISO-NE’s work in 2025 will focus on capacity auction revisions, establishing a regional energy shortfall threshold (REST), complying with FERC orders 1920 and 2023, and implementing market and technology improvements, COO Vamsi Chadalavada told the NEPOOL Participants Committee (PC) Oct. 10.  

The capacity auction changes are focused on improving how the capacity market assigns value to different resources and altering the timing of capacity auctions and capacity commitment periods (CCPs). The scope of work for the project is extensive, and ISO-NE expects the project to extend into 2027, in preparation for the 2028/2029 CCP. (See ISO-NE Responds to Feedback on Capacity Auction Reforms Scope.) 

Regional Energy Shortfall Threshold

The REST is an effort to quantify how much shortfall risk from extreme weather events the region is willing to accept during a given season.   

Chadalavada said the RTO will start working on the REST project in the fourth quarter of this year, continuing into the first or second quarter of 2025. ISO-NE is planning to conduct the first REST assessment for the winter of 2025/26. 

“Results of the first assessment will provide more data on the risk trends to guide the timing and nature of the next phase, which is to evaluate whether the possibility of exceeding the REST requires development of specific regional solutions to mitigate risks,” Chadalavada said. 

He emphasized the need for stakeholder input — especially from the states — to determine an acceptable threshold.  

Transmission Planning

Chadalavada said ISO-NE is planning to initiate a request for proposals process in 2025 for its newly approved longer-term transmission planning framework, “in anticipation of a request from the states for a competitively selected transmission solution to address the future, clean energy needs in connection with the Transmission 2050 Study.” (See FERC Approves New Pathway for New England Transmission Projects.) 

The RFP process will likely take about 18 months “from initiation through final recommendation,” Chadalavada said. 

He noted that ISO-NE will continue to work with stakeholders on “the assimilation” of the LTTP process with FERC Order 1920, with compliance on the order due in summer 2025. (See With FERC Inaction, ISO-NE Delays Order 2023 Implementation.) 

ISO-NE is also planning to work with the states in the coming year on an approach to “right-sizing” transmission upgrades “to support integration of renewables and higher load levels over the life of the transmission asset.” 

The discussions will include a focus on “methods for distinguishing right-sizing costs from asset condition project costs so that they can be evaluated accordingly,” Chadalavada said, adding that the discussions will likely begin when the states and transmission owners have completed their work on improving the asset condition project review process.  

In response to a request from the New England States Committee on Electricity (NESCOE), Chadalavada said ISO-NE will begin discussions at the Planning Advisory Committee about how advanced transmission technologies should be incorporated into transmission planning processes. 

“To the extent that ISO-NE considers such technologies currently, bringing greater visibility to that would be informative,” NESCOE wrote in August. “An effective planning process should result in the deployment of these technologies when they provide a net benefit to consumers.” 

Budget Increase

The PC also approved a 13.6% increase in its annual budget, driven by new investments in personnel and technology focused on clean energy, the impact of inflation on current operations, and a $7.8 million true up. The increases bring the projected 2025 ISO-NE budget up to about $314 million. 

ISO-NE has emphasized that the budget increase is needed to meet the growing complexity of managing the grid during the clean energy transition. The increase follows a 21.5% budget increase in 2024. (See ISO-NE Proposes 21.5% Budget Increase for 2024.) 

The budget is intended to support the addition of about 50 new full-time equivalent positions in 2025, along with improved cyber security and software capabilities.  

One stakeholder stressed that increased resources should come with increased expectations regarding the workload ISO-NE is able to take on in the future and expressed hope that the RTO will be able to accommodate more stakeholder requests.  

Operations Report

Overall energy market value was down nearly 8% in September compared to September 2023, Chadalavada told the PC, presenting his monthly operations report. Average locational marginal prices were down by about 18% from August of this year.  

While ISO-NE hit its annual peak load of more than 24,000 MW in September 2023, the September peak for this year topped out at just 16,853 MW.  

Annual power system carbon emissions continue to track higher in 2024 relative to 2023, driven by an increase in natural gas emissions.